Nordea Bank Abp's Q1 Earnings Stable Amidst Market Headwinds

Nordea Bank Abp announced its first-quarter financial results, posting a return on equity of 15.4 percent. While profitability remained solid, the bank navigated a challenging market environment marked by increased uncertainty following the escalation of the Middle East conflict in March. The cost-to-income ratio rose to 45.5 percent from 43.7 percent a year prior, partly due to reduced income from market-making activities.

The bank's total income remained stable. Net interest income, as expected, decreased by 4 percent due to lower policy rates. However, net fee and commission income saw a six percent increase, continuing a trend of steady growth. Income from items at fair value through profit or loss declined by 22 percent. Notably, income from market-making activities decreased, as unexpected and sharp rises in interest rate expectations in the euro area and Sweden led to losses in specific units.

Business volumes showed growth, with mortgage lending up by 2 percent year-on-year, primarily driven by Sweden and Norway. Corporate lending volumes increased significantly by 11 percent. Customer deposits grew for both retail and corporate segments, and assets under management rose by 9 percent to 464 billion euros. Credit quality remained robust, and the bank fully utilized its previously established management buffer for credit losses.

Capital levels remained strong, with the common equity tier 1 (CET1) ratio at 15.7 percent, exceeding regulatory requirements by 1.9 percentage points. Nordea continued its share buyback program. The bank reaffirmed its outlook for 2026, expecting a return on equity above 15 percent and a cost-to-income ratio of around 45 percent, reflecting confidence in its business model's resilience.